Comment by cs702 | Hacker News Reader

Comment by cs702 | Hacker News Reader

Thailand's "Foreign Exchange Administration and Policy Department" has advised that, quoting from the OP: "the following Bitcoin activities are illegal in Thailand: buying Bitcoins; selling Bitcoins; buying any goods or services in exchange for Bitcoins; selling any goods or services for Bitcoins; sending Bitcoins to anyone located outside of Thailand; receiving Bitcoins from anyone located outside of Thailand."

We can get a sense of how successful and lasting this edict will be with a simple mental experiment: replace "Bitcoin" with "US Dollar." The edict thus becomes: "the following US Dollar activities are illegal in Thailand: buying US Dollars; selling US Dollars; buying any goods or services in exchange for US Dollars; selling any goods or services for US Dollars; sending US Dollars to anyone located outside of Thailand; receiving US Dollars from anyone located outside of Thailand." How successful could that edict be, and how long could it last, realistically?

Foreign exchange controls are normally difficult to implement and enforce. Control of Bitcoin -- a decentralized, optionally anonymous, virtual commodity -- should be even more difficult.

I suspect a lot of Bitcoin trading volume in Thailand will simply go underground.

To put things in perspective, from 1933 - 1964 it was illegal for US citizens to own non-jewelry gold.

http://en.wikipedia.org/wiki/Executive_Order_6102

There are already many limitations on currency, this can last as long as the others.

This is actually arguably good news for Bitcoin. The government of Thailand sees it as a feasible way to bypass currency controls.

No need to control Bitcoin itself--they can control the users. That is ultimately more effective, because as with historical foreign exchange prohibitions in other countries have demonstrated, the prohibiting country generally has no control over the prohibited currency.

EDIT: Also, it seems that this is not an actual prohibition. Rather, it is merely a legal advisory memo from the national Bank of Thailand to a Bitcoin company regarding the current legal status of Bitcoin transactions in Thailand. According to the BoT, Bitcoin transactions may not be legal under the current law, so the BoT will not provide banking services to individuals or companies that will use the services for Bitcoin-based transactions or services.

They may indeed go underground. That means that legitimate businesses will have a hard time dealing with them if they deal with them at all.

Make no mistake, even if governments can't stop people trading bitcoin, they can stop it becoming mainstream in the way many BTC enthusiasts seem to want.

I'm not sure it is in their long term strategic interest to push bitcoin underground since that will make bitcoin far harder to tax (declining tax revenues -> increasing taxes and decreasing State power -> more people hiding income = the Greek Syndrome).

It doesn't necessarily matter if it's harder to tax. If the only way to exchange Bitcoins for currency is via face-to-face transactions, 90% of what usefulness it has is eliminated. The remaining use, exchange of a virtual currency for virtual goods and services, is only useful with an easy way to get ahold of a sum of said virtual currency to begin with.

Which is to say, with a sufficiently low volume of BTC being passed around, taxing it becomes as important as making sure you tax cash transactions by roadside fruit vendors or lemonade stands.

This law in the USD version was/is in force in some pretty major parts of the world. It kind of screws up the actual exchange rates - you're paying premium for the illegality. Around the time (80's) I was born you could buy a bottle of vodka for $0.80 in an USD-accepting (high-margin) shop.

I am from Brazil, I remember that in early 1990s here you was the coolest kid in the school if you showed up with a dollar bill (even a 1 USD one).

We had a 2000% inflation, and one of the government attempts to fix it was currency controls. (the fix in the end, was create a new currency that had fixed 1:1 rate with USD, and leave it 1:1 for some years until the 1998 crisis made it necessary to decouple them).

The difference between your examples is the reserve currency status of the dollar. Bitcoin doesn't enjoy this status. If there was an Edict banning Thais from owning or dealing in Icelandic Kronur (say because some Icelander had insulted the monarchy, which Thais are notoriously touchy about) then it would probably last extremely well. Banning the australian dollar (a larger currency, from an economy geographically closer to Thailand) is harder to guess; you probably couldn't ban it completely but it might remain hard-to-find.

Putting BTC and the USD on the same plane for comparison is likely to result in errors.

Your hypothetical is our reality

http://www.bbc.co.uk/news/world-latin-america-15532101

Especially receiving bitcoin would be hard to detect. You can receive bitcoins without owning a computer. Wallet on pendrive or in encoded attachment to some email on your email account is enough.

You may be interested in: http://www.bot.or.th/English/ForeignExchangeRegulations/FXRe...

think of this more of a way to extract payment from people/companies, on fear of violating law X,Y, or Z

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